Facebook is partnering with an Indian online lending firm to help provide loans to small domestic businesses, its country head said on Friday, as part of a push to bring more businesses to advertise on its platform. The social media giant is joining hands with Indifi to help provide loans ranging from Rs. 5,00,000 to Rs. 50,00,000 at annual interest rates of up to 20 percent, Ajit Mohan, Facebook India's managing director, told a virtual news conference.
Facebook Teams Up With Indian Firm to Help Provide Loans to Small Businesses
"Our aim is to provide small businesses access to loans in as little as five minutes," Mohan said. Facebook is the latest U.S. technology company to partner with a local firm in India to boost sales and its efforts to break into the cash-rich country's $300 billion e-commerce industry. The website of e-commerce firm Snapdeal, for instance, is one of the top selling channels for companies including Amazon and Flipkart. Facebook has also tied up with payments company Paytm in India. Mohan said Facebook was not looking at providing loans directly, but partnering with companies that do. "That way we can reach more businesses in India," he said.
How will this help small businesses?
"In India, we want to make sure that SMBs have the ability to advertise," Mohan said. "The way to do that is to work with financial institutions who can fund SMBs." India's small and medium enterprises contribute about 45 percent to the country's economy, but faces daunting challenges in accessing capital to grow, unable to compete with larger, better capitalized companies. India, the world's fastest growing major economy, is expected to grow 7.4 percent in the fiscal year that ends in March, according to a Reuters poll of analysts. "Facebook is the largest social network in India," Mohan said, adding that nearly 600 million of the country's 1.3 billion people are estimated to use Facebook monthly.
Why is this important for Facebook?
This is not Facebook's first venture into providing small business loans. In March, the company partnered with American Express to offer small-business loans to sellers on its platform, in a bid to boost small business sales on the platform and increase customer engagement. The service is not available in India yet. And there are other signs that Facebook's role in the Indian e-commerce business is growing. The Economic Times newspaper has reported that Facebook is in advanced talks to acquire payments platform PayTm. The world's largest social media network has been beefing up its efforts to attract more small business advertisers as it looks for ways to boost revenues from its flagship platform.
Here are the major events of the day: 1. Barclays to cut 9,000 jobs to streamline bank, improve profits: The cuts are part of a drive by Barclays, Britain's third-biggest bank, to streamline its business and improve profits in the face of new European banking rules and political uncertainty. 2. Price cuts: In a move aimed at retaining customers in the face of competitive pressures, e-commerce firm Flipkart has slashed the prices of over 20,000 products in fashion, consumer electronics and smartphones. 3. Apple confirms iOS11.1 to bring charging repair app to all iPhones: A new version of the iOS will be released that would provide tools that will enable customers to make repairs on their iPhone and iPad without having to send the device off to Apple for repair.